Unlock Tax Savings through Homeownership

Amanda Peterson

April 12, 2024  •  1 Minute Read

Money Saving Tips, Taxes

Owning a home can come with significant tax advantages. And if you're frugal, like me, you're always looking for ways to save a buck or two. On this edition of CreditSoup's Frugal Friday, let's explore some deductions you might be eligible for.

Mortgage Interest

A portion of the interest you pay on your mortgage can be deducted from your taxable income. This can be a substantial deduction, especially in the early years of your mortgage.

Property Taxes

The property taxes you pay are typically deductible as well. Remember to keep your property tax receipts for your tax records.

Home Improvement Projects

While general repairs and maintenance aren't deductible, specific improvements that add value or functionality to your home can be. These might include:

• Energy Efficiency Upgrades: Adding insulation, high-efficiency windows, or a new HVAC system can qualify for tax credits.
• Accessibility Modifications: Improvements like ramps, wider doorways, or grab bars to accommodate disabilities may be deductible.
• Home Office Conversion: If you dedicate a specific space in your home for your business needs, some of the associated costs (like a portion of utilities) might be deductible.

3 Things to Remember

1. Keep all relevant documentation, such as mortgage statements, property tax receipts, and home improvement invoices, for tax filing purposes.
2. Consult a tax professional for personalized advice on your specific situation and eligibility for these deductions.
3. Tax laws can change, so stay updated on the latest regulations to maximize your deductions.

Consider the Long-term Benefits

While some home improvements may not be immediately deductible, they can increase the value of your home, potentially leading to capital gains tax benefits when you sell.

Keep following CreditSoup for more weekly tips on making the most out of your hard earned cash, and keeping your budget top of mind.